Markets in Financial Instruments Directive 2014 information
European Union law
Directive 2014/65/EU
European Union directive
Title
Directive on markets in financial instruments
Made by
European Parliament and Council
Made under
Article 53(1) TFEU
Journal reference
L 173, 12 June 2014
History
Date made
15 May 2014
Came into force
2 July 2014
Implementation date
3 January 2018
Preparative texts
Commission proposal
No data
EESC opinion
No data
EP opinion
No data
Reports
No data
Other legislation
Replaces
Directive 2004/39/EC
Amends
Directive 2002/92/EC, Directive 2011/61/EU
Current legislation
v
t
e
Investment law sources
Institutions for Occupational Retirement Directive 2003
Undertakings for Collective Investment Directive 2009
Markets in Financial Instruments Directive 2004
Alternative Investment Fund Managers Directive 2011
Solvency II Directive 2009
See EU law
Markets in Financial Instruments Directive 2014 (2014/65/EU), commonly known as MiFID 2 (Markets in financial instruments directive 2),[1] is a legal act of the European Union (EU). Together with Regulation No 600/2014 it provides a legal framework for securities markets, investment intermediaries, in addition to trading venues. The directive provides harmonised regulation for investment services of the member states of the European Economic Area — the EU member states plus Iceland, Norway and Liechtenstein. Its main objectives are to increase competition and investor protection, as well as level the playing field for market participants in investment services. It repeals Directive 2004/39/EC (MiFID 1).
MiFID 1 was a cornerstone of the European Commission's Financial Services Action Plan, whose measures changed how EU financial service markets operate. It is the most significant piece of legislation introduced in the Lamfalussy process designed to accelerate the adoption of legislation based on a four-level approach recommended by the Committee of Wise Men chaired by Baron Alexandre Lamfalussy. There are three other "Lamfalussy Directives": Directive 2003/71/EC, replaced with Regulation (EU) 2017/1129 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, the market abuse directive, and Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market.
MiFID 1 retained the principles of the EU "passport" introduced by Directive 93/22/EEC but introduced the concept of "maximum harmonization", which places more emphasis on home state supervision. This is a change from the prior EU financial service legislation, which featured a "minimum harmonization and mutual recognition" concept. "Maximum harmonization" does not permit states to be "super equivalent" or to "gold-plate" EU requirements detrimental to a "level playing field". Another change was the abolition of the "concentration rule" in which member states could require investment firms to route client orders through regulated markets.[2]
MiFID 1, implemented through the standard co-decision procedure of the Council of the European Union and the European Parliament, set out a detailed framework for the legislation. Twenty articles of this directive specified technical implementation measures (Level 2). These measures were adopted by the European Commission based on technical advice from the Committee of European Securities Regulators and negotiations in the European Securities Committee, with oversight by the European Parliament. Implementation measures in the form of a Commission Directive and Commission Regulation were officially published on 2 September 2006.[3][4][5]
After its initial implementation, MiFID 1 was intended to be reviewed. After extensive discussion and debate, in April 2014, the European Parliament approved both MiFID 2, an updated version of MiFID 1, and its accompanying Regulation (EU) No 600/2014.[6] The directive and regulation include fewer exemptions and expand the scope of MiFID 1 to cover a larger group of companies and financial products.[7][8] Both MiFID 2 and Regulation (EU) No 600/2014 have been effective from 3 January 2018.
^"Investment services and regulated markets - Markets in financial instruments directive (MiFID)". European Commission. Archived from the original on 23 March 2017.
^This option was not taken up by all EU states.
^"COMMISSION DIRECTIVE 2006/73/EC" (PDF). Official Journal of the European Union. 2006. Retrieved 22 January 2008.
^"COMMISSION REGULATION (EC) No 1287/2006" (PDF). Official Journal of the European Union. 2006. Retrieved 22 January 2008.
^Under European law, a Directive has to be transposed into national law: a Regulation, on the other hand, is automatically binding throughout all member states.
^Elliott Holley (16 April 2014). "European Parliament passes "sensible" MiFID II". Banking Technology. Retrieved 16 April 2015.
^Hannah Smith (19 December 2014). "ESMA unveils final guidance on MiFID II rules". Investment Week. Retrieved 16 January 2015.
^"MiFID II – what is changing?". Financial Conduct Authority. 9 December 2014. Archived from the original on 3 February 2015. Retrieved 27 January 2015.
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